Sassa beneficiaries are turning to loan sharks to survive

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By Dylan Bettencourt

A growing number of people are no longer able to rely on their Sassa social grants to survive every month, and are forced to resort to loan sharks for short-term loans.

As the queues to receive their social grants grow longer, more people are also standing in line to take out loans as a means to survive until their next payment.

The Covid-19 social relief of distress grant has not been handed out for the last two months but President Cyril Ramaphosa has announced it would resume next week.

Annah Zondo, 68-year-old recipient, told GroundUp  that her family had to cut down to two meals a day to save money. Yet she still has to take out loans every month.

“I received my money yesterday but it’s already finished. I’m here to borrow money again because I finished paying my loan which I took out in December,” Zondo said.

She receives an old-age grant of R1,980 but comes home with R1,500 due to deductions.

The majority of Zondo’s grant money goes towards groceries and paying her premiums to a burial society.

Taking out a loan of R1,400 with a payment plan duration of six months will cost the borrower R462 in interest according to GroundUp.

One grant recipient Solly Mokoena took out several loans as his grant money can no longer support his family of five.

“I owe R1,800 to Net1 and I’m left with five months to finish paying it. At FinBond, I have a loan of R1,200,” the 64-year-old said.

“By the time they have taken their money, I’m left with nothing. I live by borrowing. I’m used to it. The cost of living is too high.”

Loan company Net1, which used to distribute the Sassa grants, said they have an active customer base of 1.1-million individuals and 415,000 active loans.

The average loan taken out is R1,417.

For those who don’t qualify for loans from companies like Net1, they resort to masonisha who charge as much as 40% interest monthly.

Image source: @GroundUp

This article was first published by:https://scrolla.africa/

Link: https://scrolla.africa/sassa-beneficiaries-are-turning-to-loan-sharks-to-survive/